What happened with Malkapur Bank?
The Malkapur Urban Co-operative Bank Buldhana had its banking license revoked by the Reserve Bank of India (RBI).
Latest News on Malkapur Urban Cooperative Bank
In a recent development, the Reserve Bank of India has taken the decision to cancel the license of the Malkapur Urban Co-operative Bank Limited, a financial institution situated in Buldhana, Maharashtra. The central bank has explicitly directed the bank to immediately cease all banking activities, effective from the close of business on July 5, 2023. This action by the Reserve Bank of India highlights the measures being taken to ensure the stability and integrity of the banking sector in the country.
The license of the Malkapur Urban Co-operative Bank Limited in Buldhana, Maharashtra has been revoked by the Reserve Bank of India (RBI). Effective July 5, 2023, the bank is not permitted to engage in any banking activities. The RBI has stated that the co-operative bank lacks sufficient capital and potential earnings. Additionally, it has failed to comply with certain sections of the Banking Regulation Act, 1949. The RBI has requested the Commissioner for Cooperation and Registrar of Cooperative Societies, Maharashtra to initiate the bank’s liquidation and appoint a liquidator.
Upon liquidation, depositors will be eligible to receive a deposit insurance claim amount for their deposits, up to a maximum of ₹5,00,000/- (Rupees five lakh only), from the Deposit Insurance and Credit Guarantee Corporation (DICGC), in accordance with the DICGC Act, 1961. According to the bank’s submitted data, 97.60% of depositors are entitled to receive the full amount of their deposits from the DICGC. Under Section 18A of the DICGC Act, 1961, the DICGC has already disbursed ₹496.98 crore of insured deposits based on the willingness expressed by affected depositors.
Furthermore, the Reserve Bank has emphasized that allowing the Malkapur Urban Co-operative Bank to continue its banking operations would be detrimental to public interest. Given its current financial state, the bank would be unable to fully reimburse its depositors.